"There is no gas shortage".. Excellent article from Business Week
 

https://www.businessweek.com/lifestyl...041_945564.htm

Gasoline reserves on hand are at the highest levels since the early 1990s, which is remarkable considering the nation's refineries have been cutting back on the production of gasoline because their margins have declined. In fact, average gasoline reserves on hand have risen since this past October, while oil reserves in this country have gone up virtually every week this year?and only fog in the Houston Ship Channel that kept oil tankers from unloading their crude one week kept it from being every week.

(...)

In January of this year, the U.S. used 4% less petroleum than we did a year ago. (Oil demand was down 3.2% in February.) Furthermore, demand has been falling slowly since July of last year. Ronald Bailey of Reason Online has pointed out that worldwide production of oil has risen 2.5% in the first quarter, while worldwide demand has grown by only 2%.

(...)

As for the speculators, in 2000 approximately $9 billion was invested in oil futures, while today that number has gone up to $250 billion. Now, if any publicly traded company had an additional $241 billion put into its stock in the same period, its stock would rise out of sight too?even if the company was not worth anywhere near that amount of market capitalization.

Yep. I suspect smart speculators who saw the top of the housing bubble in 2005 started shifting their assets into commodities, especially oil. Welcome to the Oil Bubble!

I think by this time next year, it'll be trading at or below $60/barrel. Wonder how the powers that be will justify insane oil prices then?

O when that Bubble burst, its going to be one heck of a mess. I'll be stocking up on the degreaser and absorb all. :D

Ok, even with increased world supply, there is no way this bubble will last. As much as members on this site dislike ethanal, when the cellulosic ethanol comes into full production with an E85 fleet and Europe, and Asia follows suit.......

The bubble will burst when we drive vehicles that hypermile themselves. Alternative fuels will have a gradual impact, you won't change the energy delivery infrastructure quickly.

You can change the vehicular portion of the infrastructure in less than a decade. Christmas 08 when my IVT design has been prototyped and tested for efficiency will be when I know the true potential.

Things could get very interesting, when OPEC realizes they have priced themselves into a competitive energy supply situation instead of a monopoly.

Their response will be to cut prices, since prices are not related to costs of production.

It will be too late.

regards
gary

I disagree, there are a great many people who cannot afford any car less than a decade old, I'm one of them at this juncture. :(

The whole point of the article is that it *isn't* OPEC who is driving up energy prices, OPEC is a consortium of suppliers, not speculators.

OPEC is not really in control of the oil prices..

I wish you success with your hydraulic motor concept, the world could certainly use the increased efficiency such a device promises.

So if OPEC has nothing to do with oil prices, why do the self-same producing countries start buying things like NASDAQ? Look at what the OPEC nations are buying up on the open market. It's everything but oil, publicly.

I have a sneaking suscpicion that they have figured out a way to insulate themselves many layers deep, and are taking their profits (which are nearly 100% as they actually are in the form of taxes) and speculating on oil futures. This has made oil more than double - more than doubling their profits - in just over a year. Reinvest until the world gets sick of it....live off the increased taxes on oil! Nice ponzi scheme that only works one way.

If there is no oil shortage, then how can OPEC be responsible for driving up prices?

Diversification of investments is something that even beginning investors know about, OPEC is simply doing what every investment adviser on the freakin' planet advocates.

If you already have oil, investing all your money in oil is a fool's errand, just because people are not Americans does not make them stupid.

How is it that a worldwide commodity - bought by people in all corners of the globe - have their prices set by OPEC rather than what the market will sustain? It doesn't make much sense to me that the OPEC guys are responsible for this lunacy.

Furthermore, if oil prices drop next year as drastically as some here have noted, then IMO all the alternative fuel initiatives will die on the vine - pretty much like they did in the 70s. The Government cannot force consumers to demand cars with higher efficiency. On the other hand, we have first-hand evidence from 2 oil crises that when oil prices become so high as to make consumers uncomfortable/unhappy, they will demand vehicles that have better effeciency. That demand will dry up if/when oil prices fall to $60/bbl.

Check out the this opionion piece, i like the idea.

https://www.washingtonpost.com/wp-dyn...060503434.html

Here's the problem with an energy tax like that: the Government will spend it. All. So the "refund" is really a big Government wealth redistribution project to "keep the money in the United States."

IMO that's not the Government's job.

BTW, in a few years - when every Chinaman has a car - gasoline will be 8 to 10 bux a gallon anyways, so why tax the everyliving crap out of it? Market pressures will force innovations in energy sources and efficiency.

Oil prices are also a function of the weak dollar, because we have a government that has mentally disconnected itself from the consequences of deficit spending.

The dollar is no longer king, and foreign countries are moving to the Euro as the basis of their international commerce. If you factor in the Dollar to Euro exhange rate, you will see most of the price increase is due to our spending what we don't have.

A child is born in this country $35,000 in debt before their first breath. No nation in history has managed to survive that kind of per capita debt burden without economic disaster.

I don't blame oil speculators. I could get 5.12 % on my retirement money one year ago, now I can't get 3 % unless I commit to many years on a CD. The govt did this to help the mortgage fiasco. My house is paid for, I built it myself, but I am now forced to subsidize the housing speculators who tried to make a quick buck and got their butts handed to them on a platter, while the govt makes my retirement savings worthless by devaluing the dollar with deficit spending.

fumesucker:

my design was concieved with two very basic parameters.

The least expensive car you can buy today would cost more to produce, because my design eliminates 25% of the manufactured components per vehicle. My next door neighbor is spending more on fuel in 6 months than the car would cost new. Simpler than the original VW of the sixties without compromising safety.

The design also places the hypermiling function in the vehicle. When you step on the gas in my design you are changing the "gear" ratios in the powertrain with an infinite choice of gear ratios, and close to 90% regeneration capability, the difference in mileage would be close to 100% in any vehicle you drive.

In 200,000 miles of driving that could easily pay for several of my vehicles due only to the two basic design principles.

The belief that you need to spend a fortune to save some money on fuel is part of the propaganda of the oil companies and auto manufacturers, and its a criminal act from my perspective.

regards
gary

My problem with it is that it is a tax on the poor. I'm a conservative/libertarian but even I can identify this for what it is. Those making less than $40K (or whatever the cutoff is) are already paying next to nothing in taxes as it is. NOW you want them to spend extra money to get to work?

Then look at someone making over 100K a year. Another $2 at the pump? They'll just grin and bear it.

I understand the points the author is trying to make about forcing a decrease in demand, I understand the principles (however apposing to the ideals this country was founded on they are) but I can tell you that no politician will vote for this because any increase in gas prices is UNPOPULAR, despite the fact that it may or may not be the right thing to do.

Sure.

Furthermore, we already have gas taxes that are supposed to be spent on road infrastructure.

Have you seen the state of the infrastructure? It sucks. Bridges are rusting away, highways are disintegrating, etc etc etc. So what do you think is going to happen if the Government increases this tax by 2 orders of magnitude? I can tell you...one word...wait for it.... ... ... pork. Pork. Pork.

falling dollar
 

Guess what folks. It's only going to get worse. It is the result of the Federal reserve printing worthless dollars so the economy doesn't collaspe. So they prolong the slow death. Bear Stearns...good example. This company should have died. They gave them money to keep them alive...who pays...we do! They print money out of thin air. We pay with inflation. Get mad!!!!! Voting may not be the answer anymore!

It's not about the saudis, the oil companies, the war....

The real estate market hasn't even come close to the bottom yet. Prices of everything will continue to rise because of the idiots at the Fed reserve. We need to look at our politicians democrate and republican as tyrants!!! The world doesn't want to invest in dollars anymore.

Vote anything but the two parties. They are both in bed with the jerks. Now they don't know what to do...they dug the hole so deep they don't have a clue how to get out.....so they cover it with crap.... Did you know the federal reserve is run by private banks? Do you know that a bank only needs 10% of your loan to give you 100%. They get the other 90% from the Fed!!! The Fed reserve prints it out of thin air. Do you know that when you go into forclosure and the bank takes your house, they make tons of money!!! They can sell it for next to nothing and they still make money!!! Remember it only cost them 10% of what you borrowed. It's called fractional reserve banking. Our system is based on it. It's win /win situation for the bankers. Guess what....the private banks that run the fed always win!!! War...they win. Depression...they win. Collaspe...they win!!! Boom economy...they win!!!

Oil is a result of our dollar's value. Guess what! The dollar is worthless. Oil, Silver, gold, wheat, rice...actual things are the only thing worth anything! I'm sure not in the stock market!! Buy things you can put in your house and hand. The trillion dollar debt is something this country has never had to deal with. It's like a shark with a wounded man.

The world has probably hit peak oil and prices should go up, speculation and the weak dollar have probably made the price of oil higher than otherwise, but IMO making oil prices higher right now is doing the world a HUGE favor in the long run. I'm very skeptical of plant-based biofuels as they take land that could be used to food for producing fuel in turn raising food prices (VERY BAD). Algae-based fuels are much better as they can be located in unfarmable land and suck CO2 directly from power plants. Genetically engineered bacteria able of producing oil is another possibility, but neither option is going to replace current supply of fuel. More likely that cultures will have to adapt to low energy lifestyles.